I've managed to get it working on RT-N16 (king kong mod 18050M) with Logitech webcam C120, uClibc from Optware the right way and uvcvideo modules from the posts above.
Here is the list of video streaming programs that work for me (thx 2 buggles for the links):
mjpg-streamer from here
palantir from here
motion from here

Unfortunately OpenWrt motion package compiled with --without-ffmpeg flag, so you can't record video, only bunch of jpeg images, which IMHO is not really convenient. I will try to recompile motion with possibility to record video to see if it works.
BTW, is there anyone succeeded with setting up motion+ffmpeg?

Another thing I noticed, my camera is capable of streaming in MJPEG mode directly (jpeg encoding is done by camera processor), but when I switched to that mode in mjpg-streamer (remove --yuv and --quality options) I get lot of artifacts in the picture.
I would prefer running MJPEG mode since YUV on 640x480 is giving high load on router CPU (~ 80-90%). Anyone get similar behavior?

So I followed buggles' instruction and dowloaded/installed v4l2convert.so (It actually installed in /jffs/usr/lib...). Now when I typed LD_PRELOAD=/jffs/usr/lib/libv4l/v4l2convert.so motion -n, it shows the following and hung:
[0] Processing thread 0 - config file /tmp/root/motion.conf

Apparently it was looking for the conf file in the directory you typed the command. So I cd to the directory where motion.conf resides and type the command again, and here is what I got:
[0] Processing thread 0 - config file /opt/etc/motion.conf
[0] Motion 3.2.12 Started
[0] ffmpeg LIBAVCODEC_BUILD 3356160 LIBAVFORMAT_BUILD 3411200
[0] Thread 1 is from /opt/etc/motion.conf
[1] Thread 1 started
[0] motion-httpd/3.2.12 running, accepting connections
[0] motion-httpd: waiting for data on port TCP 8080
[1] Using VIDEO_PALETTE_YUV420P palette
[1] Using V4L1
[1] Resizing pre_capture buffer to 1 items
Segmentation fault

I got stuck here. Don't know what to do next. I would really appreciate it if somebody can point me a direction. Thanks again!

By the way, the camera is a logitech camera, and my dd-wrt firmware version is v24-sp2 (08/07/10) mega - build 14896.

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